Clarius recruits punters

Clarius Group
has jumped more than 15 per cent in the past three days as investors have brushed aside the recruiter’s disappointing half-year guidance and are looking through to the expected earnings recovery in 2010-11.

Clarius said on Tuesday that net profit for the six months to December 31 would come in between $1.1 million and $1.4 million before one-off costs, which is down from the $1.9 million it posted at the same time last year.

However, like its peers that have also reported a slower than expected earnings recovery despite yesterday’s strong jobs data, Clarius reassured investors that things are starting to pick up and said it was well positioned to capitalise on any improvement in demand.

Australian employers added 30,000 full-time jobs last month as the unemployment rate dipped 0.1 percentage points to 5.7 per cent. The market had expected a modest rise of 5000 jobs.

Despite the potential recovery, brokers polled by Bloomberg think it is still too early for investors to buy shares in Clarius. JPMorgan said there was still clear risk of further earnings disappointment over the next few months as the group is vulnerable to any shocks to business sentiment at a time when the economic recovery remains fragile.

The broker also expressed disappointment at the latest profit guidance as margins were below expectations and the group’s efforts in reining in operational and financing costs had failed to arrest the decline in its bottom line - a sign that a recovery has yet to gain much traction.

JPMorgan has a “neutral" recommendation on the stock and a price target of 88¢ a share.